Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 1 of 22
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Rosemary M. Rivas (SBN 209147)
LEVI & KORSINSKY LLP
44 Montgomery Street, Suite 650
San Francisco, CA 94104
Tel: (415) 291-2420
Fax: (415) 484-1294
Email: [email protected]
Counsel for Plaintiff Brian Clevlen
[Additional counsel appear on signature page]
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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BRIAN CLEVLEN, individually and on behalf
of all others similarly situated
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CLASS ACTION COMPLAINT FOR
VIOLATIONS OF FEDERAL
SECURITIES LAWS
Plaintiff,
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Case No. 3:17-cv-715
v.
JURY TRIAL DEMANDED
ANTHERA PHARMACEUTICALS, INC.,
PAUL F. TRUEX, CRAIG THOMPSON, MAY
LIU and WILLIAM SHANAHAN
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Plaintiff Brian Clevlen (“Plaintiff”), by his attorneys, except for his own acts, which are
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alleged on knowledge, alleges the following based upon the investigation of counsel, which
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included a review of United States Securities and Exchange Commission (“SEC”) filings by
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Anthera Pharmaceuticals, Inc. (“Anthera” or the “Company”), as well as regulatory filings and
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reports, securities analyst reports and advisories by the Company, press releases and other
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public statements issued by the Company, and media reports about the Company. Plaintiff
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believes that additional evidentiary support will exist for the allegations set forth herein after a
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reasonable opportunity for discovery.
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CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 2 of 22
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NATURE OF THE ACTION
1.
This is a securities class action on behalf of all persons who purchased Anthera
3 common stock between February 10, 2015 and December 27, 2016, inclusive (the “Class
4 Period”), seeking remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).
5 Plaintiff’s claims are asserted against certain of Anthera’s executive officers and directors.
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2.
Anthera is biopharmaceutical company focused on advancing the development
7 and commercialization of innovative medicines that benefit patients with unmet medical needs.
8 The company has two product candidates in development: (1) Sollupura (also known as
9 Liprotamase), a novel biotechnology-derived pancreatic enzyme replacement therapy (“PERT”)
10 for the potential treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic
11 fibrosis; and (2) Blisibimod, a B-cell activating factor (“BAFF”) Inhibitor for the potential
12 treatment of IgA nephropathy.
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3.
The Company is headquartered in Hayward, California and trades on the Nasdaq
14 Global Market (“NASDAQ”) under the ticker symbol “ANTH.”
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4.
Throughout the Class Period, Defendants made materially false and misleading
16 statements regarding the Company’s business, operations and compliance.
Specifically,
17 Defendants made false and/or misleading statements and/or failed to disclose that: (i) patients
18 were not improving in the CHABLIS-SC1 clinical trial; and (2) there were dosing problems
19 inherent in the Solution study design that created challenges to obtaining responses.
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5.
On November 10, 2016, prior to the market opening, the Company issued a press
21 release announcing that the CHABLIS-SC1 clinical trial with blisibimod for the treatment of
22 systematic lupub erythematosus (“SLE”) failed to meet its primary endpoint. Defendants
23 further revealed that the trial’s structure likely hindered the results by not allowing some
24 patients to increase their dosage during the testing. As some analysts have stated, “while the
25 drug was billed as a selective antagonist of BAFF,” that intended purpose “doesn’t look like it
26 holds much water.” Accordingly, Defendants would likely abandon the trial
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6.
Upon this news, Anthera’s closing share price fell approximately 32% from
28 $2.78 on November 9, 2016, to $1.90 on November 10, 2016.
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CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 3 of 22
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7.
The following month, on December 27, 2016, the Company issued another press
2 release, announcing the Solution clinical study in cystic fibrosis patients with EPI missed the
3 CFA non-inferiority margin of the primary modified Intent to Treat (“mITT”). On this news,
4 Anthera’s closing share price fell approximately 63% from $2.01 per share on December 27,
5 2016 to $0.74 per share on December 28, 2016.
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As a result of Defendants’ wrongful acts and omissions, and the precipitous
7 decline in the market value of the Company’s securities, Plaintiff and the Class members have
8 suffered significant losses and damages.
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JURISDICTION AND VENUE
9.
The federal law claims asserted herein arise under §§ 10(b) and 20(a) of the
11 Exchange Act, 15 U.S.C. § 78j(b) and § 78t(a), and Rule 10b-5 promulgated thereunder by the
12 SEC, 17 C.F.R. § 240.10b-5, as well as under the common law.
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This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C.
14 § 1331 and § 27 of the Exchange Act, 15 U.S.C. §78aa.
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This Court has jurisdiction over each Defendant named herein because each
16 Defendant is an individual who has sufficient minimum contacts with this District so as to
17 render the exercise of jurisdiction by the District Court permissible under traditional notions of
18 fair play and substantial justice.
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Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b) and § 27 of the
20 Exchange Act because many of the false and misleading statements were made in or issued
21 from this District. Anthera is headquartered in this District, with its principal place of business
22 located at 25801 Industrial Boulevard, Suite B, Hayward, California, 94545.
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PARTIES
13.
Plaintiff Jim Ferrari is a citizen of Tennessee. He purchased Anthera securities as
26 set forth herein and in his certification filed herewith.
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14.
Anthera is a corporation incorporated in Delaware with its principal executive
28 offices located at 25801 Industrial Boulevard, Suite B, Hayward, California 94545.
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CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 4 of 22
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15.
Defendant Paul F. Truex (“Truex”) was Chief Executive Officer (“CEO”) of the
2 Company until his resignation on December 2, 2016.
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Defendant Craig Thompson (“Thompson”) was appointed as Anthera’s Chief
4 Executive Officer (“CEO”) upon Truex’s resignation on December 2, 2016, effective December
5 6, 2016. Thompson is also the President of Anthera. Previously, as of January 7, 2016,
6 Thompson was the Company’s President and Chief Operating Officer.
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Defendant May Liu is the Senior Vice President, Finance and Administration.
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Defendant William Shanahan (“Shanahan”) is Anthera’s Chief Medical Officer.
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Defendants Truex, Thompson Liu and Shanahan are collectively referred to
10 herein as the “Individual Defendants.”
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Anthera and the Individual Defendants are collectively referred to as the
12 “Defendants.”
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CONTROL PERSON ALLEGATIONS
21.
By reason of the Individual Defendants’ positions with the Company as
15 executive officers, the Individual Defendants possessed the power and authority to control the
16 contents of Anthera’s quarterly reports, press releases, and presentations to securities analysts,
17 money and portfolio managers, and institutional investors, i.e., the market. The Individual
18 Defendants were provided with copies of the Company’s reports and press releases alleged
19 herein to be misleading prior to or shortly after their issuance and had the ability and
20 opportunity to prevent their issuance or cause them to be corrected. Because of their positions
21 with the Company, and their access to material, non-public information available to them but
22 not to the public, the Individual Defendants knew that the adverse facts specified herein had not
23 been disclosed to and were being concealed from the public, and that the positive
24 representations being made were then materially false and misleading. The Individual
25 Defendants are liable for the false statements pleaded herein.
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SUBSTANTIVE ALLEGATIONS
27 Background
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Anthera is a biopharmaceutical company focused on advancing the development
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CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 5 of 22
1 and commercialization of innovative medicines that benefit patients with unmet medical needs.
2 The company has two product candidates in development:
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Sollpura (also known as Liprotamase), a novel biotechnology-derived pancreatic
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enzyme replacement therapy (“PERT”) for the potential treatment of exocrine
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pancreatic insufficiency (“EPI”) in patients with cystic fibrosis; and
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Blisibimod, a B-cell activating factor (“BAFF”) Inhibitor for the potential
treatment of IgA nephropathy.
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Sollpura represents the first soluble, stable and non-pig derived PERT to offer a
9 novel solution to patients, especially young children and adults who are either unable to
10 swallow multiple pills or are forced to use gastric tubes in order to maintain appropriate
11 nutritional health. Unlike other enzyme products for the treatment of EPI, Sollpura’s chemical
12 characteristics, its solubility and stability, make it an ideal product in either a capsule or sachet
13 formulation which can be conveniently co-administered with a variety of food products.
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Anthera is conducting two studies with Sollpura: (1) the Solution Study; and (2)
15 the Simplicity Study. The purpose of the Solution Study is to evaluate the non-inferiority of
16 Sollpura compared to approved, porcine-derived enterically-coated pancreatic enzyme
17 replacement therapy when administered to patients with cystic fibrosis and endocrine pancreatic
18 insufficiency. The Simplicity Study will evaluate the safety and efficacy of Sollpura powder for
19 oral solution, supplied in sachets.
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Blisibimod is a selective peptibody antagonist of the BAFF cytokine, also known
21 as B lymphocyte stimulator (“BLyS”), which is initially being developed as a treatment for
22 lupus. BAFF is a member of the tumor necrosis factor family and is critical to the development,
23 maintenance and survival of B-cells and plasma cells. It is primarily expressed by macrophages,
24 monocytes and dendritic cells and interacts with three different receptor subtypes expressed
25 predominantly on B-cells and plasma cells including BAFF receptor (“BAFF-R”), B-cell
26 maturation antigen (“BCMA”), and transmembrane activator and cyclophilin ligand interactor
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Blisibimod may offer a number of potential advantages over other BAFF
28 antagonists, such as: (i) Tetravelent BAFF binding domans which give to 120-350-fold higher
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CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 6 of 22
1 avidity for blisibimod than reported for monocolonal antibodies; (ii) the ability to bind to both
2 membrane-bound and soluable BAFF; (iii) lower molecular weight providing more drug per
3 200mg weekly dose; and (iv) distinct intellectual property as a peptibody (relative to antibody
4 and antibody-fragments).
5 The Material Misrepresentations and Omissions
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26.
On February 10, 2015, the Company announced the successful completion of an
7 interim analysis of its Phase 3 trial (CHABLIS-SC1) of blisibimod in patients with SLE. The
8 Company was “pleased” with the study’s ability to pass a “critical milestone” and seemed
9 optimistic about the success of the remainder of the Phase 3 trial. The press release stated, in
10 pertinent part:
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D, Calif., Feb. 10, 2015 /PRNewswire/ -- Anthera Pharmaceuticals,
Inc. (NASDAQ: ANTH) today announced the successful
completion of an interim analysis of its Phase 3 trial (CHABLISSC1) of blisibimod in patients with Systemic Lupus Erythematosus
and that the study should continue to completion as planned. An
independent statistician conducted the interim futility analysis for
the CHABLIS-SC1 study, evaluating the SRI-6 response at the 24
week time point. Enrollment in the trial is projected to conclude in
mid-2015.
"While the results of the CHABLIS-SC1 interim futility analysis
remain blinded to Anthera, we are very pleased that the study has
passed this critical milestone and now look forward to finishing
enrollment later this year," said Dr. Colin S. Hislop, Anthera's
Chief Medical Officer.
Prior to the interim analysis and in response to recent input from
the Company's Scientific Advisory Board following the
publication of clinical data from other Lupus studies with BAFF
inhibitors, the Company modified the primary endpoint of
CHABLIS-SC1 from SRI-8 response to SRI-6 response, which
was previously a secondary endpoint of the study. SRI-8 will
remain a key secondary endpoint of the study. The Systemic Lupus
Erythematosus Response Index (SRI) is an approved endpoint
recognized by the FDA for previously approved therapeutics.
"Based on the wealth of new information regarding the treatment
of SLE and BAFF inhibition, we are fortunate to have had the
opportunity to adjust our trial design," said Dr. Colin S. Hislop.
"The SRI-6 endpoint has a history of consistency across multiple
trials and represents the best possibility for success. Maintaining
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Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 7 of 22
the SRI-8 endpoint as a key secondary endpoint can maximize
our commercial opportunity for the severe patients we are
enrolling in the CHABLIS-SC1 study."
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On August 10, 2015, Anthera issued a press release announcing that the
5 Company “surpassed the enrollment target of 400 patients for the Phase 3 CHABLIS-SC1
6 clinical study” during the second quarter of 2015 and that “[t]opline efficacy and safety data
7 from the study is expected in the second half of 2016.”
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On November 6, 2015, the Company repeated that enrollment was closed for the
9 Phase 3 CHABLIS-SC1 clinical study and “[t]opline efficacy and safety data from the study is
10 expected the second half of 2016.”
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On March 14, 2016, the Company filed an annual report on Form 10-K with the
12 SEC, announcing the Company’s financial and operating results. The Company stated a
13 summary of its product development programs, noting that the CHABLIS-SC1 Phase 3 trial
14 “[t]opline data” was expected “in the second half of 2016” and the Solution Phase 3 “[t]opine
15 data” was expected “towards end of 2016 or early 2017.”
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We believe liprotamase is potentially the first soluble, stable and
non-porcine derived enzyme product to offer a novel solution to
patients who are unable to maintain appropriate nutritional health.
Liprotamase’s chemical characteristics, unlike currently available
PERTs, make it ideal for powder formulation as either a capsule,
or sachet of powder for oral solution which can be conveniently
administered in solution in a small volume of water.
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The Form 10-K stated:
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The Form 10-K further stated: “We believe the CHABLIS development program
for blisibimod may offer a number of potential opportunities for differentiation versus the
currently marketed BAFF antagonist and other novel B-cell directed therapies.”
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The Form 10-K contained certifications pursuant to the Sarbanes-Oxley Act of
2002 (“SOX”) by Individual Defendants Truex and Liu, stating that the financial information
contained therein was accurate and disclosed any material changes to the Company’s internal
control over financial reporting.
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On August 9, 2016, the Company announced that it met the enrollment target for
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Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 8 of 22
1 Phase 3 Solution clinical study and that it expected to “report topline efficacy data in the fourth
2 quarter of 2016.” With respect to the Phase 3 CHABLIS-SC1 clinical study, the Company
3 reported that it “continue[s] to collect and prepare final data from the . . . clinical study as the
4 final patients continue treatment in the study.” The press release explained that:
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The last patient in the study received their final study dose
on July 28th. As described in the protocol, patients are
followed for eight weeks after their last dose at which time
the final safety data is collected. Due to timing of this final
visit, the company expects topline efficacy and safety data
will be available prior to the annual American College of
Rheumatology Annual Meeting in November. Topline data
from the CHABLIS-SC1 will include the primary endpoint
evaluation, a six-point reduction in the Systemic Lupus
Erythematosus Responder Index (SRI-6) as well as safety
and tolerability data from the study.
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On November 4, 2016, the Company announced that it was “working diligently
13 through the adjudication for the CHABLIS-SC-1 study, which completed the last patient visit in
14 September. We currently plan to report topline efficacy and safety data prior to the 2016
15 American College of Rheumatology Annual Meeting taking place from November 11th to
16 November 16th. Topline data from the CHABLIS-SC1 will include the primary endpoint
17 evaluation, the Systemic Lupus Erythematosus Responder Index (SRI-6) as well as safety and
18 tolerability data from the study.”
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With respect to the Solution clinical trial, the press release stated that enrollment
20 was completed and that “topline efficacy data” was expected to be reported before the end of
21 2016.
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These statements were false and misleading because defendants failed to disclose
23 that: (i) patients were not improving in the CHABLIS-SC1 clinical trial; and (2) there were
24 dosing problems inherent in the Solution Study design that created challenges to obtaining
25 responses.
26 The Truth Emerges
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On November 10, 2016, prior to the market opening, the Company issued a press
28 release announcing that the CHABLIS-SC1 clinical trial with blisibimod for the treatment of
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CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 9 of 22
1 SLE failed to meet its primary endpoint based upon the SLE Respondex Index-6 (“SRI-6”) at 52
2 weeks. The press release stated, in pertinent part:
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HAYWARD, Calif., Nov. 10, 2016 (GLOBE NEWSWIRE) -Anthera Pharmaceuticals, Inc. (NASDAQ:ANTH)
today
announced that the CHABLIS-SC1 clinical trial with blisibimod
for the treatment of systemic lupus erythematosus (SLE) failed to
meet its primary endpoint based upon the SLE Responder Index-6
(SRI-6) at 52 weeks. Although 47% of patients in the blisibimod
arm versus 42% of patients in the placebo arm achieved this
endpoint, the difference was not statistically significant. The SRI
is a composite index comprised of SELENA-SLEDAI, BILAG and
Physician Global Assessment criteria. A SRI-6 response requires a
decrease of at least 6 points in SELENA-SLEDAI. The magnitude
of blisibimod treatment effects for other SLE Response (SRI-4,
and SRI-8) also did not achieve statistical significance.
Serum biological markers including B-cells, immunoglobulins, and
complement demonstrated statistically significant treatment effects
consistent with expectations and previous blisibimod clinical
studies in lupus and IgA nephropathy. Adverse events between the
blisibimod and placebo treatment arms were well balanced and
blisibimod was generally well tolerated.
“We are disappointed that the results did not demonstrate a
meaningful improvement in patients’ disease activity as assessed
by SRI endpoints,” said William Shanahan, M.D., Anthera’s Chief
Medical Officer. “We would like to thank the patients, caregivers,
investigators and key opinion leaders who made the CHABLISSC1 clinical study possible. It has yielded significant amounts of
data which we look forward to sharing with the scientific
community in the future which we believe will help to further
inform the development of treatments for severe lupus.”
The Company will continue to analyze the data in the coming
weeks from the CHABLIS-SC1 trial in consultation with key lupus
disease thought leaders to expeditiously determine the future of the
blisibimod lupus program including the on-going CHABLIS 7.5
clinical study. As the pharmacological effects on immunological
markers, such as B-cells and immunoglobulins, were as expected,
the company is continuing the development of blisibimod for the
treatment of IgA Nephropathy (IgAN) pending 48 week results
from the ongoing phase 2 BRIGHT study. IgAN has a very
different pathogenesis than systemic lupus, and the
pharmacological activity of blisibimod might prove effective in its
treatment. The Company expects to report 48-week data from the
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Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 10 of 22
BRIGHT-SC IgAN study and topline data from the Sollpura™
SOLUTION phase 3 study later this year.
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As a result of the adverse results of the blisibimod trial, the price of Anthera
3 common stock declined from a closing share price of $2.78 on November 9, 2016, to $1.90 on
4 November 10, 2016, a loss of approximately 32%, on extremely heavy trading volume.
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The truth was further revealed on December 27, 2016, when the Company issued
6 a press release announcing the Solution clinical study in cystic fibrosis patients with EPI missed
7 the CFA non-inferiority margin of the primary modified Intent to Treat (“mITT”) analysis likely
8 due to the structure of the study, which likely hindered the results by not allowing some patients
9 to increase their dosage during the testing. The press release stated, in pertinent part:
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HAYWARD, California, December 27 2016 - - Anthera
Pharmaceuticals, Inc. (NASDAQ: ANTH) today announced the
top line results of the SOLUTION clinical study in cystic fibrosis
patients with exocrine pancreatic insufficiency (EPI). The study
narrowly missed the CFA non-inferiority margin of the primary
modified Intent to Treat (mITT) analysis; however, by additional
pre-specified analyses of CFA (mITT-Baseline Observation
Carried Forward and Per Protocol), Sollpura met the noninferiority criterion. The study also confirmed that the ratio of the
three enzymes in Sollpura demonstrated an appropriate response in
the coefficient of nitrogen absorption (CNA). CNA is a measure
of protein digestion and absorption and is a key requirement of
Anthera’s planned US FDA regulatory submission. Anthera
expects to release data from the extension phase of the study in Q1
2017.
In analyzing the results of the SOLUTION study, patients' ability
to increase their doses during the study were hindered by time
restrictions and amounts allowed per protocol, while other patients
were prevented from increasing their dose due to the daily limit
(10,000 lipase units/kg/day) for porcine pancreatic enzyme
replacement therapies (PERTs). Sollpura was generally well
tolerated compared to Pancreaze, although symptoms related to
malabsorption were generally modestly more frequent in the
Sollpura arm.
In addition to the challenges to dose escalation inherent in the
design of the SOLUTION study, analytical techniques for
measuring the activity of lipase enzymes based on duodenal pH
of Cystic Fibrosis patients, indicate that Sollpura may have been
under dosed versus the Pancreaze labeled dose.
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Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 11 of 22
Given the robust activity of Sollpura in this study, in the context of
dose titration limitation and apparent reduced dosage activity,
Anthera will initiate activities for an additional clinical study of
Sollpura in patients with EPI due to Cystic Fibrosis, which Anthera
expects will enable optimized dosing and dose titration. This study
will provide investigators and patients the flexibility to adjust their
Sollpura dose based upon malabsorption symptoms at any time
during the study. Anthera believes that these modifications in the
study design will allow patients to achieve the optimal level of fat
absorption as measured by CFA. The new study will begin in
1Q’17, and Anthera anticipates only a modest delay in the filing of
the BLA around Q1 2018, as the new study will complete
concurrently with the completion of required CMC activities.
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“In the SOLUTION study, Sollpura nearly met the non-inferiority
margin with respect to fat absorption, and met the statistical
criterion for nitrogen absorption. The study data suggest that the
deficiency in fat absorption may be addressed by small changes in
study design, including more liberal dose adjustment. A need for
alternative treatments remains for EPI patients who are unable to
maintain appropriate nutritional health, especially those who seek
soluble or non-porcine therapeutic options” said Michael Konstan,
MD, Vice Dean for Translational Research at Case Western
Reserve University School of Medicine.
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“Although we are disappointed to narrowly miss the primary
endpoint, we remain encouraged by the overall SOLUTION study
results and look forward to releasing final data from and its 12
week extension phase in the future, the SIMPLICITY study and
continuation of the open-label EASY study. We would like to
thank the patients, investigators and study staff for their hard work
and dedication to our study. We are most grateful for their
commitment to our shared hope of developing new treatments for
exocrine pancreatic insufficiency, and believe that the
shortcomings of Sollpura in SOLUTION can be addressed in the
new study that we plan to initiate in 1Q’17,” said William
Shanahan, M.D., Anthera’s Chief Medical Officer.
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As a result of the adverse results of the Solution Study, the price of Anthera
23 common stock declined from a closing share price of $2.01 per share on December 27, 2016 to
24 $0.74 per share on December 28, 2016, a loss of approximately 63%.
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ADDITIONAL SCIENTER ALLEGATIONS
41.
As alleged herein, Defendants acted with scienter in that they knew that the
27 public documents and statements issued or disseminated in the name of the Company were
28 materially false and misleading; knew that such statements or documents would be issued or
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Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 12 of 22
1 disseminated to the investing public; and knowingly and substantially participated or acquiesced
2 in the issuance or dissemination of such statements or documents as primary violations of the
3 federal securities laws. As set forth elsewhere herein in detail, Defendants, by virtue of their
4 receipt of information reflecting the true facts regarding Anthera, their control over, and/or
5 receipt and/or modification of Anthera’s allegedly materially misleading statements and/or their
6 associations with the Company which made them privy to confidential proprietary information
7 concerning Anthera, participated in the fraudulent scheme alleged herein.
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LOSS CAUSATION
42.
During the Class Period, as detailed herein, Defendants made false and
10 misleading statements and engaged in a scheme to deceive the market and a course of conduct
11 that artificially inflated the price of Anthera’s securities and operated as a fraud or deceit on
12 Class Period purchasers of Anthera securities by materially misleading the investing public.
13 Later, when Defendants’ prior misrepresentations and fraudulent conduct became apparent to
14 the market, the price of Anthera’s securities fell precipitously, as the prior artificial inflation
15 came out of the price over time. As a result of their purchases of Anthera securities during the
16 Class Period, Plaintiff and other members of the Class suffered economic loss, i.e., damages,
17 under the federal securities laws.
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APPLICATION OF PRESUMPTION OF RELIANCE:
FRAUD-ON-THE-MARKET DOCTRINE
43.
At all relevant times, the market for Anthera’s securities was an efficient market
for the following reasons, among others:
a. Anthera securities met the requirements for listing, and was listed and actively
traded on the NASDAQ, a highly efficient and automated market;
b. Anthera filed periodic public reports with the SEC and the NASDAQ; and
c. Anthera regularly communicated with public investors via established market
communication mechanisms, including regular disseminations of press releases
on the national circuits of major newswire services and other wide-ranging
public disclosures, such as communications with the financial press and other
similar reporting services.
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Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 13 of 22
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44.
As a result of the foregoing, the market for Anthera’s securities promptly
2 digested current information regarding Anthera from all publicly available sources and reflected
3 such information in the prices of the securities. Under these circumstances, all purchasers of
4 Anthera securities during the Class Period suffered similar injury through their purchase of
5 Anthera securities at artificially inflated prices and a presumption of reliance applies.
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NO SAFE HARBOR
45.
The statutory safe harbor provided for forward-looking statements under certain
8 circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.
9 The statements alleged to be false and misleading herein all relate to then-existing facts and
10 conditions. In addition, to the extent certain of the statements alleged to be false may be
11 characterized as forward looking, they were not identified as “forward-looking statements”
12 when made and there were no meaningful cautionary statements identifying important factors
13 that could cause actual results to differ materially from those in the purportedly forward-looking
14 statements. In the alternative, to the extent that the statutory safe harbor is determined to apply
15 to any forward-looking statements pleaded herein, Defendants are liable for those false forward16 looking statements because at the time each of those forward-looking statements was made, the
17 speaker had actual knowledge that the forward-looking statement was materially false or
18 misleading, and/or the forward-looking statement was authorized or approved by an executive
19 officer of Anthera who knew that the statement was false when made.
20
21
CLASS ACTION ALLEGATIONS
46.
Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal
22 Rules of Civil Procedure on behalf of all persons who purchased or otherwise acquired Anthera
23 securities during the Class Period (the “Class”). Excluded from the Class are Defendants and
24 their families, the officers and directors of the Company, at all relevant times, members of their
25 immediate families and their legal representatives, heirs, successors, or assigns, and any entity
26 in which Defendants have or had a controlling interest.
27
47.
The members of the Class are so numerous that joinder of all members is
28 impracticable, since Anthera has millions of shares of stock outstanding and because the
13
CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 14 of 22
1 Company’s shares were actively traded on the NASDAQ. As of October 31, 2016, Anthera had
2 approximately 42 million shares issued and outstanding. While the exact number of Class
3 members in unknown to Plaintiff at this time and can only be ascertained through appropriate
4 discovery, Plaintiff believes that there are thousands of members in the proposed Class and that
5 they are geographically dispersed.
6
48.
There is a well-defined community of interest in the questions of law and fact
7 involved in this case. Questions of law and fact common to the members of the Class which
8 predominate over questions which may affect individual Class members, including:
9
a. whether the Exchange Act was violated by Defendants;
10
b.
whether Defendants omitted and/or misrepresented material facts in their
11
publicly disseminated reports, press releases, and statements during the Class
12
Period;
13
c. whether Defendants’ statements omitted material facts necessary to make the
14
statements made, in light of the circumstances under which they were made, not
15
misleading;
16
d. whether Defendants participated and pursued the fraudulent scheme or course of
17
business complained of herein;
18
e. whether Defendants acted willfully, with knowledge or recklessly in omitting
19
and/or misrepresenting material facts;
20
f. whether the price of Anthera securities was artificially inflated during the Class
21
Period as a result of the material nondisclosures and/or misrepresentations
22
complained of herein; and
23
g. whether the members of the Class have sustained damages as a result of the
24
decline in value of Anthera’s stock when the truth was revealed, and if so, what
25
is the appropriate measure of damages?
26
49.
Plaintiff’s claims are typical of those of the Class because Plaintiff and the Class
27 sustained damages from Defendants’ wrongful conduct in a substantially identical manner.
28
50.
Plaintiff will adequately protect the interests of the Class and has retained
14
CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 15 of 22
1 counsel who are experienced in class action securities litigation. Plaintiff has no interests which
2 conflict with those of the Class.
3
51.
A class action is superior to other available methods for the fair and efficient
4 adjudication of this controversy.
5
CLAIMS FOR RELIEF
6
COUNT I
Violation of Section 10(b) of
the Exchange Act and SEC Rule 10b-5
(Against All Defendants)
7
8
9
10
52.
Plaintiff incorporates by reference each and every preceding paragraph as though
11 fully set forth herein.
12
53.
This Count is asserted by Plaintiff on behalf of themselves and the Class against
13 all the Defendants and is based upon Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and
14 Rule 10b-5, 17 C.F.R. C 240.10b-5, promulgated thereunder.
15
54.
During the Class Period, Defendants carried out a plan, scheme, and course of
16 conduct that was intended to and, throughout the Class Period, did: (i) deceive the investing
17 public, including Plaintiff and other Class members, as alleged herein; (ii) artificially inflate and
18 maintain the market price of Anthera’s common stock; and (iii) cause Plaintiff and other
19 members of the Class to purchase or otherwise acquire Anthera’s common stock at artificially
20 inflated prices. In furtherance of this unlawful scheme, plan, and course of conduct, the
21 Defendants, and each of them, took the actions set forth herein.
22
55.
Defendants, by the use of means and instrumentalities of interstate commerce:
23 (i) employed devices, schemes, and artifices to defraud; (ii) made untrue statements of material
24 fact and/or omitted to state material facts necessary to make the statements made not
25 misleading; and (iii) engaged in acts, practices, and a course of business that operated as a fraud
26 and deceit upon the purchasers and acquirers of the Company’s common stock in an effort to
27 maintain artificially high market prices for Anthera’s common stock in violation of Section
28 10(b) of the Exchange Act and Rule 10-5.
15
CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 16 of 22
1
56.
As a result of their making and/or their substantial participation in the creation of
2 affirmative statements and reports to the investing public, Defendants had a duty to promptly
3 disseminate truthful information that would be material to investors in compliance with the
4 integrated disclosure provisions of the SEC, as embodied in SEC Regulation S-K (17 C.F.R. §
5 229.10, et seq.) and other SEC regulations, including accurate and truthful information with
6 respect to the Company’s operations and performance so that the market prices of the
7 Company’s publicly traded securities would be based on truthful, complete, and accurate
8 information. Defendants’ material misrepresentations and omissions as set forth herein violated
9 that duty.
10
57.
Defendants engaged in the fraudulent activity described above knowingly and
11 intentionally or in such a reckless manner as to constitute willful deceit and fraud upon Plaintiff
12 and the Class. Defendants knowingly or recklessly caused their reports and statements to
13 contain misstatements and omissions of material fact as alleged herein.
14
58.
As a result of Defendants’ fraudulent activity, the market price of Anthera was
15 artificially inflated during the Class Period.
16
59.
In ignorance of the true financial condition of Anthera, Plaintiff and other
17 members of the Class, relying on the integrity of the market and/or on the statements and reports
18 of Anthera containing the misleading information, purchased or otherwise acquired Anthera’s
19 common stock at artificially inflated prices during the Class Period.
20
60.
Plaintiff and the Class’s losses were proximately caused by Defendants’ active
21 and primary participation in Anthera’s scheme to defraud the investing public by, among other
22 things, failing to fully and accurately disclose to investors adverse material information
23 regarding the Company. Plaintiff and other members of the Class purchased Anthera’s stock in
24 reliance on the integrity of the market price of that common stock, and Defendants manipulated
25 the price of Anthera’s common stock through their misconduct as described herein. Plaintiff’s
26 and the Class’s losses were a direct and foreseeable consequence of Defendants’ concealment of
27 the true financial condition of Anthera.
28
61.
Throughout the Class Period, Defendants were aware of material non-public
16
CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 17 of 22
1 information concerning Anthera’s fraudulent conduct (including the false and misleading
2 statements described herein). Throughout the Class Period, Defendants willfully and knowingly
3 concealed this adverse information, and Plaintiff’s and the Class’s losses were the foreseeable
4 consequence of Defendants’ concealment of this information.
5
62.
As a direct and proximate cause of the Defendants’ wrongful conduct, Plaintiff
6 and other members of the Class suffered damages in connection with their respective purchases
7 and sales of Anthera common stock during the Class Period.
COUNT II
Violation of Section 20(a) of the Exchange Act
(Against the Individual Defendants)
8
9
10
63.
Plaintiff incorporates by reference and realleges each and every allegation above
11 as though fully set forth herein.
12
64.
During the Class Period, the Individual Defendants were privy to non-public
13 information concerning the Company and its business and operations via access to internal
14 corporate documents, conversations and connections with other corporate officers and
15 employees, attendance at management and Board of Directors meetings and committees thereof
16 and via reports and other information provided to them in connection therewith. Because of
17 their possession of such information, the Individual Defendants knew or recklessly disregarded
18 the fact that adverse facts specified herein had not been disclosed to, and were being concealed
19 from, the investing public. Plaintiff and other members of the Class had no access to such
20 information, which was, and remains solely under the control of the Defendants.
21
65.
The Individual Defendants were involved in drafting, producing, reviewing
22 and/or disseminating the materially false and misleading statements complained of herein. The
23 Individual Defendants were aware (or recklessly disregarded) that materially false and
24 misleading statements were being issued by the Company and nevertheless approved, ratified
25 and/or failed to correct those statements, in violation of federal securities laws. Throughout the
26 Class Period, the Individual Defendants were able to, and did, control the contents of the
27 Company’s SEC filings, reports, press releases, and other public statements. The Individual
28 Defendants were provided with copies of, reviewed and approved, and/or signed such filings,
17
CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 18 of 22
1 reports, releases and other statements prior to or shortly after their issuance and had the ability
2 or opportunity to prevent their issuance or to cause them to be corrected.
3
66.
The Individual Defendants also were able to, and did, directly or indirectly,
4 control the conduct of Anthera’s business, the information contained in its filings with the SEC,
5 and its public statements. Moreover, the Individual Defendants made or directed the making of
6 affirmative statements to securities analysts and the investing public at large, and participated in
7 meetings and discussions concerning such statements. Because of their positions and access to
8 material non-public information available to them but not the public, the Individual Defendants
9 knew that the adverse facts specified herein had not been disclosed to and were being concealed
10 from the public and that the positive representations that were being made were false and
11 misleading. As a result, the Individual Defendants are responsible for the accuracy of Anthera’s
12 corporate releases detailed herein and is therefore responsible and liable for the
13 misrepresentations contained herein.
14
67.
The Individual Defendants acted as controlling persons of Anthera within the
15 meaning of Section 20(a) of the Exchange Act. By reason of their position with the Company,
16 the Individual Defendants had the power and authority to cause Anthera to engage in the
17 wrongful conduct complained of herein. The Individual Defendants controlled Anthera and all
18 of its employees. As alleged above, Anthera is a primary violator of Section 10(b) of the
19 Exchange Act and SEC Rule 10b-5. By reason of their conduct, the Individual Defendants are
20 liable pursuant to section 20(a) of the Exchange Act.
21
68.
As a direct and proximate result of the wrongful conduct of Anthera and the
22 Individual Defendants, Plaintiff and members of the Class suffered damages in connection with
23 their respective purchases and sales of the Company’s securities during the Class Period.
PRAYER FOR RELIEF
24
25
26
WHEREFORE, Plaintiff demands judgment as follows:
(A)
Declaring this action to be a class action pursuant to Rule 23 of the
27 Federal Rules of Civil Procedure and certifying Plaintiff as a representative of the Class and her
28 counsel as Class counsel;
18
CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 19 of 22
1
(B)
Awarding Plaintiff and the members of the Class damages, including
2 interest;
3
(C)
Awarding Plaintiff and the Class their reasonable costs and expenses
4 incurred in this action, including and attorneys’ fees; and
5
(D)
Awarding such equitable/injunctive or other relief as the Court may deem
6 just and proper.
JURY DEMAND
7
8
Plaintiff demands a trial by jury.
9 Dated: February 13, 2017
LEVI & KORSINSKY LLP
10
11
12
13
14
15
16
17
18
19
20
21
22
By: /s/ Rosemary M. Rivas
Rosemary M. Rivas
44 Montgomery Street, Suite 650
San Francisco, CA 94104
Tel: (415) 291-2420
Fax: (415) 484-1294
Shannon L. Hopkins (to be admitted pro hac
vice)
Email: [email protected]
Stephanie A. Bartone (to be admitted pro hac
vice)
Email: [email protected]
LEVI & KORSINSKY LLP
733 Summer Street, Suite 304
Stamford, CT 06901
Tel: (203) 992-4523
Fax: (212) 363-7171
Counsel for Plaintiff Brian Clevlen and
the Proposed Class
23
24
25
26
27
28
19
CLASS ACTION COMPLAINT
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 20 of 22
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 21 of 22
Brian Clevlen
Transactions in Anthera Pharmaceuticals, Inc.
Class Period: February 10, 2015 - December 27, 2016
Date
7/23/15
7/23/15
7/23/15
7/27/15
7/29/15
8/7/15
8/11/15
8/11/15
8/24/15
8/26/15
9/15/15
9/16/15
9/25/15
10/1/15
10/1/15
10/1/15
10/15/15
10/20/15
10/21/15
10/22/15
10/28/15
10/30/15
11/6/15
11/9/15
11/10/15
11/10/15
11/18/15
11/24/15
11/24/15
12/7/15
12/7/15
12/14/15
12/14/15
12/16/15
12/21/16
12/28/15
12/28/15
12/28/15
12/28/15
12/31/15
Transaction
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Quantity
10
5
20
15
1
5
10
2
16
1
3
4
1
15
10
2
10
100
15
3
10
15
7
75
24
2
20
23
1
5
22
10
15
4
100
50
15
100
20
24
Price Per Security
$11.15
$11.15
$11.15
$11.00
$10.91
$10.00
$8.79
$9.00
$7.00
$6.67
$7.50
$7.97
$8.09
$6.03
$5.75
$5.54
$6.20
$6.19
$5.93
$5.85
$5.82
$5.80
$5.75
$5.76
$5.70
$5.70
$5.23
$5.13
$5.12
$4.93
$4.75
$4.62
$4.62
$4.37
$4.50
$4.50
$4.46
$4.45
$4.50
$4.48
Cost/Proceeds
$111.50
$55.75
$223.00
$165.00
$10.91
$50.00
$87.90
$18.00
$112.00
$6.67
$22.50
$31.88
$8.09
$90.45
$57.50
$11.08
$62.00
$619.00
$88.95
$17.55
$58.20
$87.00
$40.25
$432.00
$136.80
$11.40
$104.60
$117.99
$5.12
$24.65
$104.50
$46.20
$69.30
$17.48
$450.00
$225.00
$66.90
$445.00
$90.00
$107.52
Case 3:17-cv-00715-RS Document 1 Filed 02/13/17 Page 22 of 22
1/7/16
1/12/16
1/12/16
1/27/16
2/1/16
2/3/16
2/11/16
2/11/16
2/18/16
2/23/16
5/2/16
5/2/16
5/5/16
5/12/16
6/14/16
6/17/16
6/27/16
7/15/16
8/25/16
9/1/16
10/12/16
10/14/16
10/17/16
10/17/16
10/18/16
10/19/16
11/4/16
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
Purchase
2
30
50
20
25
5
40
2
33
3
23
1
31
30
30
60
10
33
98
70
50
70
50
21
36
55
70
$3.96
$3.11
$3.02
$3.10
$3.14
$2.86
$2.50
$2.52
$2.91
$3.01
$3.48
$3.47
$3.10
$3.32
$3.15
$2.98
$3.00
$3.00
$2.95
$2.90
$3.00
$2.94
$2.83
$2.81
$2.79
$2.63
$2.18
$7.92
$93.30
$151.00
$62.00
$78.50
$14.30
$100.00
$5.04
$96.03
$9.03
$80.04
$3.47
$96.10
$99.60
$94.50
$178.80
$30.00
$99.00
$289.10
$203.00
$150.00
$205.80
$141.50
$59.01
$100.44
$144.65
$152.60